>CRUDE MKT EYES EQUITIES AS OPTIMISM FALTERS

London - Crude oil market is likely to closely eye fortunes of equity markets as doubts over economic recovery gather pace, say Simon Wardell at Global Insight. "Optimism and confidence may be just petering out at this stage. If stock markets have definitely hit a top in the near term we could see some knock on in the commodities," he says. "You're hearing a little more concerns about the great green shoots - they don't seem as strong as they did a few months ago." ICE August Brent -9c at $70.15/bbl, Nymex July light, sweet -25c at $70.22/bbl.

Crude drops on econ doubts, EIA data eyed

London - Crude reverses earlier gains ahead of weekly US EIA inventory data due 1430GMT Wednesday. Market expecting another round of crude stock draws, gasoline expected to build. Tuesday API reported 1.3m bbl crude draw, 2.1m bbl gasoline build. Financial markets continue to influence crude - dollar pares earlier weakness, while equity markets drop on recovery unease. "Stock markets seem to have stalled a little bit which is one of the reasons why crude prices have stopped going up. Even with crude stock draws it may be a while before we break to the upside," says Christopher Bellew at Bache. ICE August Brent -4c at $70.20/bbl, Nymex July light, sweet -27c at $70.20/bbl.

Nymex crude rebounds ahead US oil inventories data

Singapore - Crude prices in Asia rebounded Wednesday, rising above $71 a barrel as traders bet on higher prices ahead of weekly U.S. oil inventories data due later in the global day.



"The past two days, we have seen oil trade below $70 and not hold," said Mike Santander, investment adviser at Sander Capital Advisors in Seattle. "We will need oil to close below that barrier if we want it to trade lower."



At 0645 GMT, New York Mercantile Exchange sweet crude futures for delivery in July traded at $71.15 a barrel, up 68 cents in the Globex electronic session. August Brent crude on London's ICE Futures exchange rose 70 cents to $70.94 a barrel.



People are really starting to look closely at the EIA data," said Ben Westmore, commodities economist at National Australia Bank in Melbourne. "We probably need to see a more than 2 million barrel drop in stockpiles before oil prices will move upward."



The Energy Information Administration is expected to report that crude stocks fell by 1.7 million barrels last week, according to the average estimate of 12 analysts survey by Dow Jones Newswires.



Meanwhile, gains in crude prices have been correlated with the weakness of the U.S. dollar, Westmore said. The dollar weakened during Asian trading against the euro and pound, making commodities such as oil more attractive to investors.



At 0644 GMT, oil product futures were mixed.



Nymex reformulated gasoline blendstock for July, the benchmark gasoline contract, fell 75 points to 206.36 cents a gallon, while July heating oil traded at 184 cents, 150 points higher.



ICE gasoil for July changed hands at $583.00 a metric ton, down $6.00 from Tuesday's settlement.

Source: COMMODITIESCONTROL

>CRUDE BREACHES USD71 AHEAD OF OIL INVENTORY DATA

Singapore - Crude oil futures in Asia breached USD71 a barrel Wednesday as traders bet that weekly U.S. crude inventory data will show larger-than-expected drawdowns on an improving global economy.

Data from the U.S. Energy Information Administration later Wednesday may show that crude oil inventories fell by 700,000 barrels, according to the average estimate of analysts surveyed by Dow Jones Newswires.

"Although there is a lack of focus on current supply-demand fundamentals, investors still have one eye watching inventory," said Jonathan Kornafel, director for Asia at Hudson Capital Energy in Singapore.

"If we see another withdrawal, it gives funds and investors one more reason to push prices higher."

On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $71.05 a barrel at 0708 GMT, up $1.04 in the Globex electronic session. July Brent crude on London's ICE Futures exchange rose 83 cents to $70.45 a barrel.

A broad rise in Asian share markets and a weakening U.S. dollar helped oil prices reach a new seven-month intraday high during Asia trading.

"A weaker dollar is definitely a factor that explains some of the movement in price," said Toby Hassal, an analyst for Commodity Warrants Australia in Sydney. "A lot of speculative funds are flowing into the oil market."

Some analysts cautioned that the rise in crude prices was short-lived because demand for gasoline and other products was still weak.

"Demand for petroleum products in the aggregate fell off the proverbial cliff in the week following the U.S Memorial Day holiday," wrote analysts at the Schork Report in a note to subscribers. Meanwhile, "crude oil supplies are flush, as is the capacity to refine it."

In fact, oil prices eventually should fall back in the near-term, said David Moore, commodities strategist for Commonwealth Bank of Australia.

"Oil market fundamentals remain fragile, and there is an anticipatory element in the gains," he said, noting that prices would quickly reverse on weak economic data.

At 0709 GMT, oil product futures were up.

Nymex reformulated gasoline blendstock for July - the benchmark gasoline contract - rose 180 points to 198.47 cents a gallon, while July heating oil traded at 182.56 cents, 180 points higher.

ICE gasoil for July changed hands at $565 a metric ton, up $9.75 from Tuesday's settlement.

Source: COMMODITIESCONTROL

>INDIA SCRAP SALES RISE AS GOLD TOPS INR15,000/10 GRAMS

Mumbai - Scrap gold sales in India, the world's largest consumer of the yellow metal, is likely to pick up pace following a sharp rise in local prices, industry officials said Tuesday.

This could be bad news for those waiting for a revival of Indian import demand.

Indian imports had briefly recovered in April due to strong demand during the Akshaya Trithya festival but imports slowed again in May and could fall further in June following the rise in prices.

If the uptrend in prices continue, there could be a repeat of the January-March quarter, when imports plunged to around 1-2 metric tons a month amid strong scrap sales and soaring import prices, traders said.

Spot gold in Mumbai, the largest bullion market in the country, has risen above 15,000 rupees per 10 grams, inching towards the all-time high of INR15,800/10 grams hit in February, prompting investors to book profit by selling their old gold in the market.

"We are seeing (daily) scrap sales of 50-100 kilograms in the last few days. This could double if prices continue to rise," said Ketan Shroff, managing director of Pushpak Bullions Ltd.

Average daily scrap sales in April were around 25-30 kgs.

People are expecting prices to rise to INR16,000/10 grams in the coming days following predictions that spot gold will hit $1,000/oz in the international market, he said.

"Many are waiting for prices to reach those levels before selling," Shroff said, adding most of the sales proceeds are being invested in local equity markets.

India's benchmark Sensex has gained nearly 80% since early March amid rising risk appetite among investors and on improved market sentiment following a clear win for the ruling Congress Party-led alliance in recent elections. Better-than-expected corporate results have also boosted sentiment.

Scrap Sales Picking Up In Smaller Towns

In Jaipur, another major market, scrap gold sales are yet to pick up speed, but as prices continue to advance there could be a rise in old jewelry sales, said Rameshwar Lal Goel, president of the Sarafa Traders Committee.

In Chennai, a major market in south India, scrap sales could rise to around 60-70 kg per day, from the usual average of 30 kg, if prices continue to rise, said Daman Prakash, director of MNC Bullion Pvt. Ltd.

"Scrap sales will not rise to the levels we saw in January-March, but some of the people who missed out during the last rally to INR16,000 will try selling now," Prakash said.

During January-March, average daily scrap sales in Chennai were 80-100 kgs, according to traders.

Shroff of Pushpak Bullions said increasing availability of scrap gold will impact imports in the months ahead.

India imported around 15 tons of gold in May, down from 29 tons in April.

"Banks have enough stocks with them, while jewelry offtake is slow. Fresh orders won't be booked at these levels and we could see negligible imports this month," said Shroff.

In June 2008, the country had imported 24 tons of gold, according to the Bombay Bullion Association.

"Unless prices correct to INR13,500/10 grams, imports are going to be very low for the whole year," said Goel.

He noted prices are unlikely to move downward anytime soon.

Source: COMMODITIESCONTROL

>GOLD PRICE TO HOLD EVEN IF US APPROVES IMF GOLD SALE

London - The U.S. Congress could approve International Monetary Fund gold sales as early as next week, but that decision shouldn't cause a drop in gold prices, analysts said Friday.

"This issue appears now fully priced into the gold market and any announcement confirming sales should not move the market - apart from perhaps a knee-jerk reaction," said John Reade, an analyst at UBS.

Gold hit a three month high Friday due to U.S. dollar weakness across a number of currencies such as the euro and pound. Traders and analysts said the metal is heading towards $1,000 a troy ounce with speculative buying reentering the market and the dollar weakening.

At 1116 GMT spot gold was trading at $974.90/oz, up 1.7% from Thursday's close.

The approval to sell gold, along with an increase in U.S. funding to the IMF, is scheduled for a debate beginning Monday as part of the 2009 Supplemental.

An initial version of the Supplemental, which includes a wider number of issues such as defense spending, was passed by both the House of Representatives and the Senate earlier this month.

The version passed by the House didn't include the IMF provision but the Senate did approve the limited sale as long as it is done in a way that won't disrupt the market.

Discussions over a final draft between representatives from each house are due to begin next week with a vote possible by next Friday.

At the G20 summit in London in April, nation participants agreed the IMF could sell 403.3 metric tons of gold as part of efforts to leverage up to $6 billion in concessional loans for low-income countries over the next few years.

In order for the sale to proceed, 85% of IMF shareholders need to approve the proposal. Since the U.S. has 17% of the votes, it has a de facto veto over the proposal, which requires Congressional approval, but IMF Managing Director Dominique Strauss-Kahn told Dow Jones Newswires this week he expects Congress will soon approve the sale.

"We do not believe the sales, should they occur, will harm gold prices," said HSBC analyst James Steel.

Other member states must also approve the sales plan, which may take many months, HSBC's Steel said, adding the sales are likely to be included in a new Central Bank Gold Agreement, or CBGA. The current CBGA agreement expires in September and analysts expect a new one to be announced soon.

Under the CBGA, 17 European central banks agreed to limit gold sales to 500 tons a year. The pact is adhered to on an informal basis by the U.S., the Bank of International Settlements and the IMF.

Source: COMMODITIESCONTROL

>INDIA GOLD IMPORTS SEEN DN 50% IN MAY; HIGH PRICES

Mumbai - India's gold imports in May will fall by nearly 50% on year to around 15 metric tons, as high prices limit local demand, a top industry official said.

The rally in equity markets have also hit investment demand in gold, said Suresh Hundia, president of the Bombay Bullion Association.

Rising stock prices since early March have spooked investment interest in gold in the world's largest market for the yellow metal, he said in an interview.

Gold imports between January and March were only about 10 tons, but shot up in April to 29 tons because of a dip in prices and strong demand during the Akshaya Trithya festival, which Hindu's consider an auspicious time to buy gold.

But "import demand in May has not improved," Hundia said. Part of the reason was the recent strength in gold prices.

"Demand will pick up only if prices fall to around INR14,000/10 grams," Hundia said, adding that level is likely to be reached by May-end.

Currently, gold is trading around INR14,600/10 grams in the local market.

Stronger Rupee To Lower Local Prices

A stronger rupee, which has risen by over 5% against the dollar since April 1, is likely to bring down the local price of gold, Hundia said.

So far, the impact of a stronger local currency has been marginal as gold has risen in the global market in recent weeks.

"Spot gold prices have risen to $960/oz from about $860/oz, so a correction is likely," he said.

"I expect prices to drop to $912/oz to $932/oz by the end of this month. Once that happens, Indian prices will automatically fall to INR14,000/10 grams and local demand will start picking up," Hundia said.

He said he expects the rupee to strengthen further to about 46.00 to a dollar, in the coming weeks. At 0815 GMT, the rupee was trading around 47.65 to a dollar.

India imports more than 90% of the 700 tons to 800 tons of gold sold in the country annually.

Hundia said gold imports in 2009 are likely to be in line with last year's imports of 396 tons.

The chance of an increase in demand looks remote as investment buying in gold has disappeared with few willing to bet on the yellow metal at prices above INR12,000/10 grams.

However, banks in India, which had imported gold in April just ahead of the Akshaya Trithya festival, have been able to sell most of their stocks, Hundia said.

Scrap gold sales are also thin at the moment and volumes are likely to pickup only when prices rise to INR15,000/10 grams, Hundia said.

Source: COMMODITIESCONTROL

>Crude up at 6-Mo high on OPEC rollover

London - Crude oil futures rose to fresh six-month highs Thursday in London after the Organization of Petroleum Exporting Countries left its output targets unchanged at a summit in Vienna.

In a decision largely expected by the market, OPEC - which produces 40% of the world's crude - cited the state of the global economy as a reason for leaving its production policy unchanged.

Despite some recent positive economic indicators, "the world is nevertheless still faced with weak industrial production, shrinking world trade and high unemployment; for this reason, the conference decided to maintain current production levels unchanged," OPEC said in a press release.

At 1154 GMT, the front-month July Brent contract on London's ICE futures exchange was up $0.28 at $62.78 a barrel, after touching the highest level in six months at $63.08 a barrel.

The front-month July contract on the New York Mercantile Exchange was trading $0.05 higher at $63.48 a barrel after earlier hitting a six-month high at $63.93 a barrel.

The ICE's gasoil contract for June delivery was up $7.75 at $495.25 a metric ton, while Nymex gasoline for June delivery was down 177 points at 187.40 cents a gallon.

The recent rally in oil prices is enough to satisfy OPEC members and they "don't want to endanger pushing economies that are still unsteady," by embarking on new cuts, said David Hart, an analyst at Hanson Westhouse in London.

"It's a pretty pragmatic move on their part...[a cut] would have been effectively putting more strain on those economies" trying to get out of recession, he said.

Last year, OPEC embarked on a series of production cuts to reduce oil supplies by 4.2 million barrels a day. The cuts have helped to shore up oil prices, which are 40% higher since the start of 2009.

In the wake of Thursday's meeting, OPEC officials pledged to raise compliance to the 2008 cuts in a bid to counteract oversupply.

Francisco Blanch, head of global commodities research at Bank of America Merrill Lynch in London, warned economic uncertainties and high inventories were still a risk for OPEC.

"The market is steadily but surely coming into balance and obviously they're happy about it...[but] September will be a different environment and maybe we will get a different response there," Blanch said. OPEC's next meeting is scheduled for Sept. 9 in Vienna.

Separately, oil market participants are also looking ahead to the U.S. Department of Energy inventory report, due at 1500 GMT. Analysts surveyed by Dow Jones Newswires expect the DOE to report a 500,000 barrel decline in crude oil stocks, a 1.7 million barrel fall in gasoline inventories and a 1.1 million barrel rise in distillate supplies.

Source: COMMODITIESCONTROL

>ASIA CRUDE OUTLOOK : OPEC, FUEL OIL TO SUPPORT MIDEAST SOURS

Singapore - The Middle East crude oil market will hold firm in the coming week as the trading month for July cargoes draws to a close, with chatter from the Organization of Petroleum Exporting Countries likely to further lend support.

OPEC, which counts six Middle East producers among its 12 members, will meet Thursday to discuss policy at a time when benchmark oil futures have climbed above $60 a barrel despite record inventories and lingering questions over the prospects for a global recovery in demand.

The group, which pumps 40% of the world's crude, isn't expected to hold back more output as a result, although hawkish members including Iran can be counted on to talk up prices.

"They'll probably maintain cuts and tighten compliance (to quotas)," a South Korean refinery official said of OPEC's recent pledge to reduce supply.

Even before OPEC ministers stream into their Vienna gathering, Middle East high-sulfur or "sour" crude has already drawn strong buying interest, a trend that's likely to continue in the near term.

That's because profit margins for fuel oil, the primary product from processing Middle East crude, has strengthened, just as refineries are filling their books for the start of the third quarter - when plants reopen after seasonal maintenance.

Firm Demand Despite Arb

Asia's reference fuel oil crack spread, calculated as the discount of Singapore high-sulfur fuel oil to Dubai crude swaps, was quoted Friday by a broker about minus $5 a barrel for June, easing only modestly from the previous week.

This means Middle East supplies will likely remain in demand, even if favorable arbitrage economics present Asian importers the option of shipping home low-sulfur or "sweet" crude from the Atlantic basin.

The premium of London Brent futures to Dubai swaps, or the exchange-of-futures-for-swaps, was valued by another broker at a narrow $1.05 a barrel for July, less than half the spread that would encourage West-to-East supply.

"(Supply from) Saudi Arabia, Kuwait and the United Arab Emirates will do well," the refinery official predicted.

Meanwhile, a handful of July-loading cargoes, mostly of Abu Dhabi origin, remain uncommitted, but offers in the coming days probably won't be reduced.

These include light sour grades such as Lower Zakum and Umm Shaif, which changed hands in recent days at relatively strong premiums of nearly 20 cents a barrel to official selling prices - a $100,000 markup on every cargo.

Oil majors are expected to absorb unsold cargoes internally rather than reduce their offers significantly, traders say.

On May 28, look out for a new round of monthly term prices, starting with trade calculations for Malaysia's light sweet benchmark Tapis crude, to be priced retroactively for May.

The Oman OSP for July, which comes after the settlement of futures contracts traded on the Dubai Mercantile Exchange, will be finalized May 29.

That's on track to rise to a seven-month high above $56 a barrel.

Crude steadies on dollar, but econ doubts linger

Crude oil futures steadied Friday in Asia on a continued dollar weakness, although sentiment remained under pressure on concerns over the health of the global economy.

Oil traders were reluctant to bid up prices aggressively, with regional share markets declining, after the U.S. Labor Department Thursday reported a record number of jobless claims and amid speculation the country's top credit rating may be in jeopardy.

On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at $61.52 a barrel at 0707 GMT, up 47 cents in the Globex electronic session.

Nymex reformulated gasoline blendstock for June rose 233 points to 182.30 cents a gallon, while June heating oil traded at 153.63 cents, 69 points higher.

Oil traders are still taking direction from various readings of the economy amid uncertainty over the outlook for global demand.

Overnight, financial markets were hit after Standard & Poor's put the U.K.'s credit rating on negative outlook because of extra obligations taken on by the government to tackle the recession.

While the recent rally in U.S. equities may have encouraged buying by some long-only index funds, it remained unclear if the uptrend in oil prices represented a longer-term return to positive performance.

"Both industrial metals and energy markets look vulnerable to a deterioration in sentiment toward risky assets over the coming weeks as positive correlations with equity markets have strengthened recently," analysts at Barclays Capital, led by Gayle Berry, said in a report.

"In addition, key markets in sub-sectors such as oil and copper look as if they may have moved ahead a little faster than is justified by the current state of market fundamentals."

The U.S. Energy Information Administration Wednesday posted a second weekly drop in the country's crude inventories, although stocks remained at their highest levels since 1990.

Still, some upside support may be possible as traders turned their focus to the gasoline market in the lead-up to the long Memorial Day weekend, which kicks off the peak U.S. summer driving season.

U.S. gasoline stockpiles have slipped below the five-year average level, according to the EIA.

Nymex electronic trading will continue over Monday's U.S. Memorial Day holiday, although the pit session will be closed.

Meantime, oil prices may also find support from continued dollar weakness as investors seek shelter by buying hard assets.

The greenback traded at Y94.18 after falling to Y93.91, while the euro was up at $1.3942, from $1.3910.

"We continue to view this weakening dollar trend as an important force in enticing passive capital into the long side of the crude futures as a longer-term asset play or inflation hedge," Jim Ritterbusch, president at trading advisory firm Ritterbusch and Associates, said in a note to clients.

At 0707 GMT, oil prices on London's ICE Futures exchange also pushed higher.

Brent crude for July rose 53 cents to $60.46 a barrel, while June gasoil changed hands at $486 a metric ton, chalking up $9.25 from Thursday's settlement.

Source: COMMODITIESCONTROL

>Crude extends gains tracking rise in Japan shares

Singapore - Crude oil futures rose Wednesday for the third straight day in Asia, tracking a rise in Japanese shares and cautious sentiment ahead of oil inventory data from the U.S. Department of Energy.

"The oil price has nothing to do with fundamentals," said Ken Hasegawa, a broker with Newedge Japan. "It has been (strongly) affected by the stock market and currency market."

The Nikkei and the yen rose after better-than-expected GDP data were reported by Japan, the world's second-largest economy and its largest oil importer.

Meanwhile, the U.S. government's Energy Information Administration is expected to report crude oil inventories fell 700,000 barrels in the week to May 15, according to the average estimate of 13 analysts polled by Dow Jones Newswires.

"The EIA doesn't have a big impact on the oil market," Hasegawa said, adding investors recently have shrugged off bearish news.

A larger-than-expected decline in oil stocks may provide some support for oil prices, but larger inventories won't push oil prices down further, he said, adding oil will likely trade in a $57-$62 range Wednesday.

On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at $60.19 a barrel at 0658 GMT, up 11 cents in the Globex electronic session. July Brent crude on London's ICE Futures exchange rose 4 cents to $58.96 a barrel.

At 0658 GMT, oil product futures were up.

Nymex reformulated gasoline blendstock for June - the benchmark gasoline contract - rose 263 points to 184 cents a gallon, while June heating oil traded at 149 cents, 19 points higher. ICE gasoil for June changed hands at $475 a metric ton, up $5.50 from Tuesday's settlement.

Crude touches USD60 but fundamentals weak

Singapore - Nymex crude holding firm in Asia after touching psychologically important USD60 mark, with strengthening regional share markets offering upside lead. "(Traders) once again drew a long and overextended line between higher equities quotes and an expectation that the economy, and oil demand with it, will improve. It may make some kind of vague and hopeful sense, but we have difficulty trying to assign precise numbers from one to the other," says Peter Beutel at Cameron Hanover. "We still feel prices are constructing a top. A switch of focus from equities to oil market fundamentals would be bearish." June crude - still most actively traded contract ahead of today's expiration - up 77 cents on Globex at USD59.80/bbl.

To see full report: COMMODITIESCONTROL

>Gold to remain supported by economy, diversification

London - Gold demand in the first quarter rose, but there were large differences in demand geographically, with some parts of the world selling precious metal holdings while western economies piled into the metal, the World Gold Council said Wednesday.

Global gold demand rose in the first quarter to total 1,028 metric tons, up 35% on the year. Demand for exchange traded funds, bars and coins offset a decline in jewelry sales and industrial demand elsewhere, the WGC data showed in its Gold Demand Trends report.

Bar hoarding, which largely covers the non-western markets, shifted from a net inflow of 49.4 tons in the first quarter last year to a net outflow, or dishoarding, of 33.2 tons in the first quarter of 2009.

In contrast, other net retail investment, which covers western investor activity in the secondary retail market rose from 9.8 tons to 89.0 tons.

"Non-western markets have heavily succumbed to profit-taking activity of late," the WGC said.

For example, while ETF demand rose more than six times in the first quarter from a year ago to total 465 tons, jewelry demand fell 26% to total 352 tons.

Markets such as India and the Middle East are large jewelry consumers with India being the largest.

"The important factor is that other sectors are taking jewelry's place," said Rozanna Wozniak, investment research manager at the WGC. "And some consumers in India may buy gold on dips."

A recovery in jewelry demand will depend somewhat on the gold price - lower prices tend to spur more buying. However, with economies remaining weak and some forecast to post further losses in growth, jewelry demand could remain under pressure, the WGC said.

Institutional gold demand also appears to have risen in the first quarter, the WGC said.

Inferred investment rose, not due to a rebuilding of speculative positions, but instead demand for larger bars over 1 kilogram rose by 29% to total 115.3 tons, the WGC estimates.

Global gold supply rose 34% on the year to total 1,144 tons in the first quarter of the year.

The growth in supply came largely from gold jewelry recycling flows, which rose 55% on the year to total 558 tons. Mine production rose 3% to total 560 tons in the first quarter, helped by some new projects.

Supply was also boosted by a decline in central bank gold sales to 35 tons, down 54% from the first quarter last year and a drop in producer dehedging.

"Overall I expect investor interest to be underpinned because investors are rethinking allocations seeing gold's role longer term as insurance rather than just a safe haven," Wozniak said.

Source: COMMODITIESCONTROL

>Precious metals trade sharply down; equities surge

Mumbai - Gold traded down in global market weighed by U.S. dollar strength and higher equity markets but traders and analysts said the metal could trend higher if the dollar weakens. Following the suite gold-silver futures traded lower on Multi Commodity Exchange Monday on selling pressure from higher levels and strong dollar. As of now precious metals are taking cues from the global market and traded lower on the domestic front.

The gold June futures traded down by Rs 201/10gm and silver May futures down by Rs 204/kg.

MCX most active gold June contract opened down by Rs 28 at Rs 14,719/10gm. The contract saw movement between Rs 14,501 and Rs 14,719/10gm. At 10.35 am IST, the contract traded down Rs 201 at Rs 14,546/10gm. Total volumes in June contract recorded 5376 lots.

MCX gold mini the most active June contract opened down by Rs 22 at Rs.14, 725/10gm. The contract saw movement between Rs. 14,542 and Rs. 14,725/10 gm. At 10.38 am IST, June contract traded down by Rs 197 at Rs. 14,550/10 gm. Total volumes in June contract recorded 6825 lots.

Benchmark silver July contract opened down by Rs 26 at Rs 22,491/kg. The contract fluctuated between Rs 22,265 and Rs 22,500/kg. At 10.39 am, IST, silver July contract traded down by Rs 204 at Rs 22,361/kg. Total volumes in July contract recorded 31925 lots.

MCX silver mini June futures opened up by Rs 29 at Rs. 22,695/kg. It fluctuated between Rs.22,299 and 22,695/kg. At 10.40 am mini silver June futures traded down by Rs 202 at Rs 22,364/kg. Total volumes in June contract recorded 4178 lots.

India gold futures dn 2.3% on strong INR

Singapore - India June MCX gold contract down 2.3% at INR14,408/10 grams due to sharp rise in INR following rally in local equity markets. "The weakness is likely to continue for the next one-two sessions because of the rupee," says Debjyoti Chatterjee of Admisi Commodities. Physical demand still weak, although some stockist buying will be seen at current levels, he adds; tips contract to fall further to INR14,360/10 grams level today.

Asia spot gold edges up, inflation concerns

Sydney - Spot gold nudged higher in Asia Monday, lacking specific news to drive prices but holding firm on long-term concerns about inflation.

At 0716 GMT, spot gold traded at USD931.65 a troy ounce, up 75 cents on the New York close.

Inflation as a future threat has been a focus for investors since the U.S. economy showed some signs of bottoming, even though inflation is unlikely to take off for some time.

"But people feel that if they don't get in on inflation now, they'll miss the boat. We expect long-term inflation to be a positive factor for gold," said a Sydney-based trader.

U.S. economic data on Friday showed again some evidence that the worst of the recession may be over. April consumer prices were unchanged and while industrial output still fell, it declined at a slower pace than in March.

On the charts, gold faces resistance at usd935/oz and usd965/oz, said Barclays Capital, adding that hopes gold could again break out to touch the March 2008 record high of usd1,032/oz looked premature.

"The previous consolidation phase lasted 16 months before breaking to new highs; the current range has been in place for 14 months, which gives further room for consolidation at higher levels before a meaningful breakout to all-time highs later in 2009," Barclays said.

Physical demand for gold continues to disappoint.

Turkey's gold jewelry exports fell 23.21% on the year to 4.983 metric tons in April.

That left gold exchange-traded funds as the only source of demand, with holdings in the SPDR Gold Trust fund, listed in New York, unchanged at 1,105.62 tons.

At 0733 GMT, spot silver traded at usd14.06/oz, up 11 cents. Platinum was up usd5.50 at usd1,106.50/oz and palladium unchanged at usd223.00/oz.

Gold futures on Tocom were down Y5 at Y2,860 a gram for the April 2010 benchmark contract, while platinum futures were down Y61 at Y3,410/gram.

Spot gold eases on stronger dollar, weak oil

London - Spot gold eased Monday as the dollar strengthened and oil prices declined.

Traders said the euro might give back some of its recent gains against the dollar this week, possibly dragging gold lower.

At 0843 GMT, spot gold was trading at $929.20 a troy ounce, down 0.16% on the day.

Spot silver was down 0.25% at $13.895/oz.

Spot platinum rose 0.55% to $1,106.50/oz and spot palladium was down 0.2% at $222/oz.

"We lost a little bit on profit-taking on fears that we can fall more with the weaker EUR/USD," said Commerzbank precious metals trader Michael Kempinski.

The EUR/USD looks like it will retrace lower in coming days, which could lead to gold testing a key support at $925/oz, Kempinski said.

A break below there could lead to a selloff, although a pickup in risk aversion may avert selling, he added. "We have to see if the safe-haven buying comes back into the market."

Traders said the market was relatively quiet and market participants were waiting for platinum-specialist Johnson Matthey's annual platinum and palladium report for 2008, due out later Monday.

"With platinum week this week, people will be focused on platinum and palladium," said a senior precious metals trader in London.

UBS analyst John Reade said the report should contain positive news, especially about Chinese demand and struggling mine production.

"[The] longer-term outlook looks strong and we see no reason why platinum will not trade sharply higher in coming years," Reade said in a report Friday.

Source: COMMODITIESCONTROL

>CRUDE OIL (MORGAN STANLEY)

Crude Oil : Bullish or Bearish?

• Bearish Indicators
>High Inventory levels
>Spare Capacity on the rise as OPEC cuts production

• Bullish Economic Indicators
>Upward GDP Revisions
>US ISM Data and China’s PMI Index
>Increased Crude Oil Import by China

• Oil regaining its Negative Co-relation to the depreciating dollar

• Future supply concerns keep us bullish in longer term; however we are bearish in the shorter term

• Most Asian equities discounting $65-US$75/bbl

• Asian Plays on Crude Oil: Cairn India, Australian E&Ps and CNOOC

• Asian Negative Plays on Crude Oil: HPCL, BPCL, IOCL and Sinopec

Asian E&P Stocks: Leveraged to Crude Prices

COMMENTS

• High correlation in long term – E&P stocks exhibit a higher correlation with WTI prices in the long term.

• In the recent past, Oil has again started its negative co-relation to the depreciating dollar.

• Australian stocks and Cairn India are not only highly correlated in the long term, but also are most sensitive to change in oil prices.

• Indian State refiners have a negative correlation with crude oil prices due to negative marketing margins on selling of MS, HSD, LPG and Kerosene.

To see full report: CRUDE OIL

>Spot gold unchanged; capped by dlr, equities

London - Spot gold prices were unchanged Friday in Europe with gains capped by U.S. dollar strength and mostly higher equity markets.

Market participants said the metal is likely to remain range bound due to little interest from both the physical jewelry market and investors buying Exchange traded funds or bars.

At 0900 GMT, spot gold was trading at $924.60 a troy ounce, down 0.1% from Thursday's close.

Spot gold trade is quiet Friday with the metal attracting little investor and physical interest, said a Switzerland-based trader.

Germany-based physical metal dealer Heraeus said demand for bars "was again very mellow" this week.

Holdings in exchange traded funds remain steady, but aren't rising significantly.

Gold holdings in the New York-listed SPDR Gold Trust ETF rose for the first time since May 6 data showed Thursday to 1,105.62 metric tons from 1,104.09 tons. Holdings have moved only marginally since April 23 and remained unchanged as of Friday data. SPDR is the largest gold ETF.

Gold is likely to remain in a range between $915/oz and $935/oz until there is more clarity on the economic recovery, the Switzerland-based trader said. Market participants will wait for the U.S. to open to provide some direction he said, adding that U.S. April consumer price index and April industrial production may spark some interest when they are released later Friday.

Looking ahead, fundamentals support gold in a $850/oz to $1,000/oz range this year, with the possibility the price could move above the top end of that range next year, the chief executive of AngloGold Ashanti Ltd. said Friday.

The other metals were also mostly unchanged. As of 0900 GMT, spot silver was at $14.01/oz, up 0.1%. Spot platinum was at $1,111.50/oz, up 0.2%. Spot palladium was at $222.50/oz, down 0.4%.

Gold-silver futures trade lower on strong USD

Mumbai - Gold traded unchanged in global market weighed by U.S. dollar strength and higher equity markets but traders and analysts said the metal could trend higher if the dollar weakens. Following the suite gold-silver futures traded lower on Multi Commodity Exchange Friday on selling pressure from higher level and strong dollar. As of now precious metals are taking cues from the global market and traded lower on the domestic front.

The gold June futures traded down by Rs 86/10gm while silver May futures down by Rs 229/kg.

MCX most active gold June contract opened down by Rs 22 at Rs 14,809/10gm. The contract saw movement between Rs 14,751 and Rs 14,830/10gm. At 5.52 pm IST, the contract traded down Rs 86 at Rs 14,747/10gm. Total volumes in June contract recorded 13778 lots.

MCX gold mini the most active June contract opened up by Rs 15 at Rs.14, 785/10gm. The contract saw movement between Rs. 14,740 and Rs. 14,849/10 gm. At 5.52 pm IST, June contract traded down by Rs 82 at Rs. 14,752/10 gm. Total volumes in June contract recorded 17184 lots.

Benchmark silver July contract opened down by Rs 65 at Rs 22,762/kg. The contract fluctuated between Rs 22,600 and Rs 22,895/kg. At 5.52 pm, IST, silver July contract traded down by Rs 229 at Rs 22,598/kg. Total volumes in July contract recorded 13692 lots.

MCX silver mini June futures opened down by Rs 23 at Rs. 22,780/kg. It fluctuated between Rs.22,590 and 22,895/kg. At 5.55 pm mini silver June futures traded down by Rs 204 at Rs 22,620/kg. Total volumes in June contract recorded 20582 lots.

To see full report: COMMODITIESCONTROL

>Silver improves; gold down on profit taking

Mumbai - Gold traded down in global market weighed by U.S. dollar strength and higher equity markets but traders and analysts said the metal could trend higher if the dollar weakens. Following the suite gold-silver futures traded lower on Multi Commodity Exchange Friday on selling pressure from higher level strong dollar. As of now precious metals are taking cues from the global market and traded lower on the domestic front.

The gold June futures traded down by Rs 30/10gm while silver May futures up up by Rs 23/kg.

MCX most active gold June contract opened down by Rs 22 at Rs 14,809/10gm. The contract saw movement between Rs 14,788 and Rs 14,817/10gm. At 10.56 am IST, the contract traded down Rs 30 at Rs 14,803/10gm. Total volumes in June contract recorded 1801 lots.

MCX gold mini the most active June contract opened up by Rs 15 at Rs.14, 785/10gm. The contract saw movement between Rs. 14,780 and Rs. 14,849/10 gm. At 10.58 am IST, June contract traded down by Rs 29 at Rs. 14,805/10 gm. Total volumes in June contract recorded 2638 lots.

Benchmark silver July contract opened down by Rs 65 at Rs 22,762/kg. The contract fluctuated between Rs 22,762 and Rs 22,889/kg. At 10.59 am, IST, silver July contract traded up by Rs 23 at Rs 22,850/kg. Total volumes in July contract recorded 1605 lots.

MCX silver mini June futures opened down by Rs 23 at Rs. 22,780/kg. It fluctuated between Rs.22,780 and 22,872/kg. At 11.00 am mini silver June futures traded up by Rs 28 at Rs 22,852/kg. Total volumes in June contract recorded 1986 lots.

Asia spot gold unchanged; focus on inflation

Sydney - Spot gold stuck to little changed levels in Asia Friday, and focused on dollar movements and equities.

Prices closing above the $920 a troy ounce technical level overnight has boosted positive momentum, helping gold to stand firm despite stronger equity markets in Asia and the dollar trending sideways against the euro.

"Right now there isn't much interest on either side but it's holding pretty well above $920/oz, helped by the PPI data," said Anderson Cheung, director of precious metals at Mitsui Bussan in Hong Kong.

U.S. producer price index data for April overnight showed a rise of 0.3% on month, well above market expectations.

"It means the inflation concerns could be valid, even though the economy is so weak at the moment," said Anderson.

The primary catalyst behind gold's recent strength has been U.S. dollar weakness, with fears for future inflation and renewed risk appetite lessening the case for holding cash.

Later Friday markets will see consumer price index data, another inflation gauge, which will be keenly watched following the PPI for further clues on changes in deflationary or inflationary pressures.

Other traders said it was too early for inflation pressures to be felt, but it's best not to stand in the way of market sentiment.

"The best trade right now is to do nothing. It's too early for inflation risk," said a Tokyo-based trader.

"Banks are still not giving out credit, U.S. banks are told to raise capital, and have to shrink their balance sheets - in that environment, how can inflation happen? But you can't stand in the way of a rising market, so we need to keep asking ourselves how true the price rise is," the trader said.

Another concern is the lack of physical buying as prices moved above the $900/oz level, traders said, meaning that technical and speculative momentum needs to keep building to propel prices higher.

At 0711 GMT, spot gold traded at $925.70/oz, unchanged from the New York close, and silver traded at $14.01/oz, down 4 cents. Platinum was up $6 at $1,117.00/oz and palladium down 50 cents at $223.50/oz.

Gold futures on Tocom were down Y7 at Y2,864 a gram for the April 2010 benchmark contract, while platinum futures were up Y58 at Y3,474/gram.

Gold quiet but PPI data keeps it well bid

Singapore - Spot gold at $926/oz, up 30 cents since NY close, but market very quiet, looks unlikely to move much before the weekend, says Anderson Cheung, director of precious metals at Mitsui Bussan in Hong Kong. "Right now there isn't much interest on either side but it's holding pretty well above $920, helped by the PPI data," he says. U.S. PPI for April up 0.3% on-month, well above market expectations. "It means the inflation concerns could be valid, even though the economy is so weak at the moment." Says primary underlying catalyst behind recent gold strength is USD weakness; fears for USD mean bias is to the long side.

Source : COMMODITIESCONTROL

>Nymex crude up on dollar slide; stockpile focus

Singapore - Crude oil futures pushed higher Wednesday in Asia as the dollar declined, while sentiment was also supported ahead of weekly U.S. government oil data.

While U.S. crude stockpiles have risen steadily to multiyear highs, a separate report from the American Petroleum Institute industry group late Tuesday showed an unexpectedly steep drawdown last week, alongside declines in product inventories, putting traders on the defensive.

"This week's API report was the most bullish report seen in a very long time. That makes today's (Energy Information Administration) report critical," said Peter Beutel, president at trading advisory firm Cameron Hanover.

On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at $59.78 a barrel at 0655 GMT, up 93 cents or 1.6% in the Globex electronic session.

Nymex heating oil for June climbed 196 points to 152.66 cents a gallon, while June reformulated gasoline blendstock traded at 169.33 cents, 254 points higher.

Nymex crude overnight spiked above the psychologically important $60-a-barrel mark for the first time since Nov. 11, as traders bet the approach of summer would lift gasoline consumption and tighten the market.

While U.S. crude stockpiles have climbed nine straight weeks to their highest since 1990, the country's gasoline stocks are comparable with year-ago levels, suggesting demand - while still weak - is still matching supply.

The dollar's decline Wednesday against the euro and the yen also shored up buying interest in dollar-denominated commodities, including oil and gold.

The EIA, a unit of the Department of Energy, is expected to report across-the-board builds in U.S. crude and product stockpiles.

Commercially held crude inventories are expected to have climbed 1.3 million barrels in the week to May 8, according to the average prediction from 15 analysts polled by Dow Jones Newswires.

Gasoline stockpiles were probably unchanged on week while distillates, including heating oil and diesel, may have risen 1.3 million barrels, the survey showed.

The average refinery run rate was seen 0.1 percentage point up from 85.3% of capacity previously.

The EIA's Weekly Petroleum Status Report is due at 1430 GMT.

The API, apart from the crude stockdraw, also reported gasoline stocks declining 2 million barrels, as well as a 1.8 million-barrel drop in distillates.

"While additional price gains are difficult to justify based on pure fundamental analysis, we are still leaving open the possibility of some additional near-term price strength," Jim Ritterbusch at Ritterbusch and Associates said in a note to clients.

"We would caution against selling this market at the present time and we will evaluate a trading stance in light of the market's response to the EIA report."

Later Wednesday, the Organization of Petroleum Exporting Countries will release its monthly report, potentially offering some hints of its thinking ahead of a policy meeting May 28.

The Middle East-dominated, 12-member group pumps 40% of the world's crude.

At 0655 GMT, oil prices on London's ICE Futures exchange also rose.

Brent crude for June, which expires Thursday, was up 94 cents at $58.88 a barrel, while June gasoil changed hands at $490.75 a metric ton, chalking up $7.50 from Tuesday's settlement.

Source: COMMODITIESCONTROL

>Nymex crude down on profit taking; econ unease

Singapore - Crude oil futures lost ground Monday in Asia as traders opted to take profit amid a lack of upside leadership from regional equities.

Sentiment remained cautious despite the recent run-up in oil and share prices, as concerns over the health of the global economy lingered amid steep job losses and bloated crude inventories in key markets.

"We continue to worry about demand in oil markets," said Peter Beutel, president at trading advisory firm Cameron Hanover.

"The assumption is that consumption will rebound if the economy turns. Nonetheless, the four-week aggregate averages seem to be getting worse each week."

On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at $57.98 a barrel at 0658 GMT, down 65 cents in the Globex electronic session.

Nymex heating oil for June slipped 134 points to 150.50 cents a gallon, while June reformulated gasoline blendstock traded at 168.25 cents, 230 points lower.

Nymex crude Friday spiked to $58.57 a barrel, the highest intraday price since Nov. 17, as traders interpreted a slower-than-expected pace in U.S. job losses as a sign the economy may be bottoming out.

The Labor Department said 539,000 nonfarm jobs were lost last month, lifting unemployment to 8.9% - the highest rate in a quarter century.

Still, oil analysts cautioned the market's near-term outlook remained uncertain, particularly with fundamentals staying weak.

The U.S. Energy Information Administration May 6 reported the country's crude stockpiles rose for the ninth straight week to 375.3 million barrels, the highest since 1990, despite aggressive output cuts by the Organization of Petroleum Exporting Countries.

"Macroeconomic expectations certainly do seem to have stabilized and then begun a process of some improvement," analysts at Barclays Capital, led by Paul Horsnell, said in a report late Friday.

"Stronger price performance and a better macroeconomic environment - at least in terms of expectations - are both positive for market sentiment, but the jury is still out as to when the flow of oil market data could become the dominant source of support for oil."

Looking ahead, a slew of official reports are due this week, potentially offering further clues of where global oil consumption may be headed.

The EIA will release its monthly report Tuesday as well as its outlook for summer fuels demand, followed by OPEC on Wednesday, then the International Energy Agency, the energy security watchdog of the Organization for Economic Cooperation and Development, on Thursday.

At 0658 GMT, oil prices on London's ICE Futures exchange were mixed, with June Brent crude down 59 cents at $57.55 a barrel.

Gasoil for May, expiring Tuesday, changed hands at $481.25 a metric ton, chalking up $4.25 from Friday's settlement.

MCX crude oil erodes early gain

Mumbai - Crude oil at MCX eroded the early gain and traded in the negative territory during the evening session Monday. The domestic market fell down in unison with international market which tumbled by more than 2.80 per cent during the intra day session. The investors preferred to book profit ahead of the OPEC meeting.

The uncertainty on the economic recovery is still hanging on the market sentiments, keeping the prices down below USD 58 a barrel.

June Crude oil at New York Mercantile Exchange (NYMEX) was seen to trade at USD 57.13 [-1.50] a barrel. The market made high of USD 58.60 during the intra day session.

The price of crude oil at MCX was traded lower at 6.03 PM as May contract quoted at Rs 2831.00 [-26.00] a barrel. The contract traded in a range of Rs 2878-2812 a barrel. The far month contracts also traded down as June and July contract quoted at Rs 2888.00 [-31.00] and Rs 2940.00 [-34.00] a barrel each respectively.

OPEC meeting provides oil price uncertainty

London - Outcome of the upcoming OPEC meeting provides uncertainty for the oil market short-term, says Edward Meir at MF Global. "The cartel may feel under pressure to go along with yet another round of cuts, as hawks in the group argue that, despite rising prices, crude stockpiles are increasing and could derail the recent gains, perhaps once the recent infatuation with equities is over...On the other hand, if political pressures prevail, OPEC may pass on the cuts altogether, stressing increased compliance instead." ICE June Brent -93c at $57.21/bbl, Nymex June light, sweet -$1.07 at $57.56/bbl.

Source: COMMODITIESCONTROL

>Spot gold steady, dollar provides support

London - Spot gold prices traded steady in Europe Monday and traders and analysts said as long as equity markets continue to inspire more confidence in the broader markets gold prices will likely drift.

At 0931 GMT, spot gold was trading at $913.20 a troy ounce, down 0.3% from Friday's close. Spot silver was at $13.88/oz, down 0.7%. Spot platinum was at $1,134.50/oz, down 1%. Spot palladium was at $237/oz, down 0.6%.

"Gold prices will struggle to make a convincing move higher if equities remain bullish," said Mitsubishi analyst Tom Kendall.

In the broader market, European stocks traded down and oil prices were lower. Lower oil prices fed into broader commodity weakness, Kendall said.

A weaker U.S. dollar is providing some support Monday, but investor demand has dissipated with exchange traded fund holdings remaining mostly unchanged. Kendall said in the short-term, gold prices will likely trade sideways to lower.

Gold holding in the SPDR Gold Trust ETF, listed in New York, were again unchanged at 1,104.09 metric tons, and moved only marginally since April 23.

On the technical charts, a close above $919/oz and $920/oz could inspire some buying, Kendall said.

Overall, recent price moves indicate market participants are uncertain about price direction, said Standard Bank. The market's uncertainty over its next direction is illustrated by falling volumes on COMEX and the liquidation of long speculative positions, the bank said.

Gold price dips should be viewed as a buying opportunity for now as long as $902.6/oz holds as support, said FuturesTechs analysts. "We'll switch to short-term neutrality if this level breaks," FuturesTechs said.

Spot gold prices down slightly, quiet trade

London - Spot gold prices are trading down slightly in a quiet market, says Mitsubishi analyst Tom Kendall. "Gold prices will struggle to make a convincing move higher if equities remain bullish," Kendall says. Adds that a weaker dollar is providing some support Monday, but investor demand has dissipated with exchange traded fund holdings remaining mostly unchanged. Says in the short-term, gold prices will likely trade-sideways-to-lower. Spot gold is trading at $913.50/oz, -0.3% from Friday's close.

Asia spot gold steady, weak dollar helps

Sydney - Spot gold prices were steady in Asia Monday, reacting to a weaker dollar, but overall activity was quiet, traders and analysts said.

At 0656 GMT, gold traded at $915.75 a troy ounce, down 45 cents on the New York close.

Better-than-expected U.S. non-farm payroll data Friday boosted equity markets and pared some of gold's gains, but prices held up relatively well.

While waning risk aversion on the back of signs of the U.S. economy bottoming out should clip gold, it appears to have a stronger impact on the dollar, which in turn is helping gold, said Phillip Futures Analyst Adrian Koh.

"I think the argument that concerns for rising inflation are also driving gold is premature. The market is still focused on the economy, and excess liquidity isn't going to hit for another two years down the road," Koh said.

Kitco Analyst Jon Nadler said inflation risk continues to be "practically nil at the moment. One does not come out of a deflation of this size by immediately flipping over into a highly inflationary environment. Here, and now, at best, we might have an absence of deflation."

Gold prices have shown "impressive resilience" in the past few weeks given lack of exchange traded fund buying and a rangebound dollar, Deutsche Bank said in a note.

Gold's outlook would depend on direction for the dollar. "We have argued for some time that we believe risks are more skewed to U.S. dollar weakness, which may be triggered by a relapse in global equity markets," Deutsche Bank said.

Gold holding in the SPDR Gold Trust ETF, listed in New York, were again unchanged at 1,104.09 metric tons, and moved only marginally since April 23.

At 0652 GMT, spot silver was down 2 cents at $13.97/oz. Platinum was down $5.50 at $1,141.50/oz and palladium was unchanged at $239.00/oz.

On Tocom, April 2010 gold futures were down Y13 at Y2,916 a gram, while platinum was down Y52 at Y3,633/gram.

Source: COMMODITIESCONTROL

>Asia spot gold steady, weak dollar helps

Sydney - Spot gold prices were steady in Asia Monday, reacting to a weaker dollar, but overall activity was quiet, traders and analysts said.

At 0656 GMT, gold traded at $915.75 a troy ounce, down 45 cents on the New York close.

Better-than-expected U.S. non-farm payroll data Friday boosted equity markets and pared some of gold's gains, but prices held up relatively well.

While waning risk aversion on the back of signs of the U.S. economy bottoming out should clip gold, it appears to have a stronger impact on the dollar, which in turn is helping gold, said Phillip Futures Analyst Adrian Koh.

"I think the argument that concerns for rising inflation are also driving gold is premature. The market is still focused on the economy, and excess liquidity isn't going to hit for another two years down the road," Koh said.

Kitco Analyst Jon Nadler said inflation risk continues to be "practically nil at the moment. One does not come out of a deflation of this size by immediately flipping over into a highly inflationary environment. Here, and now, at best, we might have an absence of deflation."

Gold prices have shown "impressive resilience" in the past few weeks given lack of exchange traded fund buying and a rangebound dollar, Deutsche Bank said in a note.

Gold's outlook would depend on direction for the dollar. "We have argued for some time that we believe risks are more skewed to U.S. dollar weakness, which may be triggered by a relapse in global equity markets," Deutsche Bank said.

Gold holding in the SPDR Gold Trust ETF, listed in New York, were again unchanged at 1,104.09 metric tons, and moved only marginally since April 23.

At 0652 GMT, spot silver was down 2 cents at $13.97/oz. Platinum was down $5.50 at $1,141.50/oz and palladium was unchanged at $239.00/oz.

On Tocom, April 2010 gold futures were down Y13 at Y2,916 a gram, while platinum was down Y52 at Y3,633/gram.

Gold still a dollar play - Deutsche Bank

Singapore - Gold prices have shown "impressive resilience" in past few weeks given lack of ETF buying, rangebound USD, says Deutsche Bank. Adds outlook depends on direction of USD going forward, tips dollar to break its recent range in near term; "we have argued for some time that we believe risks are more skewed to U.S. dollar weakness, which may be triggered by a relapse in global equity markets." Sticks to its forecast that gold to average $914 in 2009. Notes any more signs that central banks or sovereign wealth funds diversifying into gold would also be potential positive catalyst. Spot gold at $914.55/oz, down $1.65 since Friday's NY close.

India gold futures likely weak on strong INR

Singapore - India June gold contract likely to open down pressured by strong INR, weak trend in overseas spot gold, says Tejas Seth, analyst at SMC Global Securities; tips contract in INR14,360-INR14,620/10 grams band for day. Increasing optimism of recovery in global economy is leading to decline in safe-heaven buying for gold, he adds. Contract last ended down 0.2% at INR14,506.

Source: COMMODITIESCONTROL

>Crude near '09 highs on economy recovery theme

London - Crude oil futures traded near 2009 highs Tuesday during ongoing optimism over the outlook for the economy, before drifting lower on nervousness over fundamental support for a break higher.

Nymex crude topped out at USD54.60 a barrel Tuesday, just shy of the USD54.66 a barrel mark set in March, representing crude's highest traded level of 2009.

While expectations of more stockpile builds in U.S. inventory data, due Tuesday, proved a deterrent to a test of the highs, strength in equity markets retained the potential to push crude through them, analysts said.

"Sentiment in stock markets appears to be improving and that's been helping the market again," said Ole Hansen, manager of futures and fixed income trading at Saxo Bank in Copenhagen. "We're heading into storage numbers but, despite the high numbers we've seen recently, the market has been ignoring them. The market wants to hang onto the recovery theme and it's difficult to go against it."

At 1122 GMT, the front-month June Brent contract on London's ICE futures exchange was down 10 cents at USD54.48 a barrel.

The front-month June light, sweet, crude contract on the New York Mercantile Exchange was trading 22 cents lower at USD54.25 a barrel.

The ICE's gasoil contract for May delivery was up USD5.50 at USD455.25 a metric ton, while Nymex gasoline for June delivery was down 2 points at 158.58 cents a gallon.

Macro data Monday bolstered optimism that the worst of the global economic decline may now be in the past, which, along with firmer equity markets, has hinted at a more positive outlook for crude demand.

A rise in China's purchasing managers index above 50 for the first time in nine months, as well as a 3.2% increase in U.S. pending house sales, were among the latest "green shoots" to help nurture hopes for the global economic outlook.

Nymex crude settled Monday at a fresh 2009 high as U.S. share markets surged on U.S. macro data.

"With the outlook for risky and pro-growth assets continuing to improve (particularly as U.S. equity markets turn positive for the year), we are growing more constructive on energy markets," said technical analysts at Barclays Capital.

Weekly U.S. inventory data due later Tuesday and Wednesday, expected to reveal further builds in crude stockpiles, nonetheless stoked some nervousness over whether crude has sufficient support to push higher Tuesday, despite previous bearish data failing to weigh on prices.

The American Petroleum Institute is set to release weekly U.S. inventory data at 2030GMT Tuesday, a precursor to weekly data from the U.S. Energy Information Administration Wednesday. The EIA is expected to report a 2 million-barrel increase in the country's crude stockpiles in the week to May 1, according to the average prediction from seven analysts polled by Dow Jones Newswires.

Gasoline stockpiles may have built by 500,000 barrels and distillates, including heating oil and diesel, by 1 million barrels, the survey showed.

"The fundamental picture still remains a weak link," said David Hart, oil and gas analyst at Hanson Westhouse in London. "That said, expectations for another (U.S.) inventory build this week are already priced into the market, suggesting these factors are less of a concern for investors at the moment."

Source: COMMODITIESCONTROL

>Spot gold steady on weaker USD, technicals

London - Spot gold held steady above a key psychological support Tuesday on dollar weakness and positive technicals.

Traders said gold was looking to equity and currency markets for cues that would help it extend its recent rally.

At 0934 GMT, spot gold was trading at USD902.75 a troy ounce, up 40 cents, or 0.04%, from 0000 GMT. Gold rallied to a one-week high Monday and closed above USD900/oz Monday, a mildly bullish near-term signal, traders said.

"After breaking the USD900 level, it should become support now," said Afshin Nabavi, head of trading and physical sales at Swiss bullion house MKS Finance. "I think overall people have to buy dips."

Nabavi said next resistances for gold were at USD909/oz and USD916/oz.

Light physical buying and fresh gold ETF investment were also giving gold some upwards momentum, traders said.

While physical buying has tailed off since gold touched a low of USD865 in mid-April, physical demand did provide a floor to prices and investors may try to keep gold above USD900 now that it has regained that support, said Commerzbank gold trader Michael Kempinski. "I think we'll try to defend USD900."

The stronger tone in gold came despite the ongoing recovery in global equity markets, which were up again overnight.

If gold continues to do well, investors may keep their money in gold rather than shifting it into equities, said Kempinski. Still, better economic data may not benefit gold as much as equities, as the threat of inflation is still far on the horizon, he said.

U.S. manufacturing data later Tuesday is expected to provide some impetus to gold, as should any news about the upcoming results of the U.S. government's stress tests for banks.

Spot silver was 0.5% higher at USD13.078/oz.

Spot platinum was unchanged at USD1,117/oz, and spot palladium fell 0.7% to USD216.50/oz.

Source: COMMODITIESCONTROL

>Asia fuel oil strengthens but demand doubts remain

Singapore - Expectations of tightening supply is lifting sentiment in Asia's physical fuel oil market this week, but it remains to be seen whether this strength can be sustained against the weight of a suspect demand outlook.

The global economic slowdown slashed demand for residual fuel in the core marine and power sectors in the first quarter, causing stocks to build up to 21 million barrels as of Wednesday in Singapore, Asia's oil hub.

Supply may tighten in May, however, as the Europe-to-Asia arbitrage window has closed and refineries are expected to produce less fuel oil during the second quarter maintenance season.

"May crude runs are likely to be lower," due to poor margins, an Indian refiner said.

Refineries in several Asian countries, especially those in Japan, plan to reduce crude runs in the April-June quarter by at least 10% on year, as refining margins have been cut by weak distillates demand.

Supply cuts by the Organization of Petroleum Exporting Countries have also made heavy sour crude more expensive, causing some refiners to switch to lighter grades with lower fuel oil yield, traders said.

Asia, which gets the bulk of its residual fuel supply from the West, is unlikely to get more supply from Europe in May as the arbitrage window is "closed by a few dollars," a Singapore trader said.

While there is still some time left to fix May arrivals, there isn't much oil in Europe "to be pointed this way", he said.

Some of the Middle Eastern supply has recently been diverted to Europe, and exports from the region could fall as domestic demand starts to build up in June with the start of the Middle Eastern summer, traders said.

Weak Demand Weighs

On the demand side, lower fuel oil prices earlier this week have drawn inquiries from the key China market, and buying from Japan, South Korea, Vietnam, Taiwan and Indonesia has rebounded slightly.

Wholesale gasoline and diesel prices in China are rising and could prompt independent refiners to raise operating rates. These refiners use straight-run fuel oil as feedstock, as they aren't allowed to import crude oil.

"It's easy to raise prices (of oil products) but hard for them to fall. So the government is likely to maintain prices at current levels to ensure healthy refining margins," a Chinese trader said.

In Japan, low-sulfur fuel oil demand revived after Tokyo Electric Power Co. failed to restart its Kashiwazaki-Kariwa nuclear power station.

Pakistan State Oil's large fuel oil requirements for May-July could also help to tighten supply in the Middle East.

But some traders doubt that the demand is sustainable.

China's demand could wither if crude continues to recover and push fuel oil prices higher, they say.

High stocks and large inflows due in April also continue to weigh on sentiment.

"There's still an awful lot of oil on its way," the Singapore trader said.

"It's far more than what we need in Singapore and bunker demand is still subdued," he said.

Average monthly bunker sales at Asian ports this year have fallen about 10%-20% on year, according to traders estimates.

Tepco is still keen to restart its nuclear plant by summer, and if liquefied natural gas prices drop as expected it could pull some operators away from fuel oil.

Meanwhile, exports from the U.S. and Carribean Sea to Asia could rise in May to "well over 2 million tons", a second Singapore trader said, adding that some of these cargoes had originated from Europe.

"I am not convinced we're going to be tight. Demand is still falling and we don't need that much oil," he said, pointing out that the market is still in contango.

"The key is whether the Middle East will slow down (fuel oil) exports, but their (domestic) demand is falling as well. We're already seeing May barrels from Saudi Arabia," he said.

Source: COMMODITIESCONTROL